Solar’s Strong Momentum Could Slow Its Future Growth
The success of solar power could mean it becomes less attractive for home users in the future. Utilities are reaching the threshold where, under state law, they can be less generous to solar customers.
If you put solar panels on your home to generate power, sometimes you’ll produce more than you can actually use. When that happens, your power meter spins backwards.
Utilities then buy that power from you and put it out on the grid for other users. That transaction is called “net metering.”
But when the utilities reach a certain percentage of customers generating solar power, they can look at alternatives to net metering.
They have reached that point in Snohomish County. Jim West, the Snohomish County Public Utility District's assistant general manager of customer service, says the current net metering scenario isn’t financially sustainable as more and more customers sign on and sell their extra power.
“We buy that at our retail rate, and our cost of generation or our cost to buy power in the marketplace might be 3 or 4 cents. And our retail rate is 10.25 cents,” West said. “So, we’ve got a cost disparity there that we’re trying to true up for the long term.”
The utility’s commissioners recently discussed an alternative proposal where owners of new home solar installations would have to sell everything they produce to the utility at market rates. Then those owners would have to buy back the power they need.
Solar installers have been crying foul. Several attended the commission meeting in July to register their concerns.
“Before your meter goes backwards, as long as your house is consuming the power that you’re producing, you shouldn’t have to pay anybody for that,” said Jeremy Smithson, owner and founder of Puget Sound Solar. “You bought that thing, you paid for it and this is what you’re getting for your investment.”
The utility says they want more input from the public as to what would work. But it will need to adjust to keep it fair for all ratepayers in the system as more solar generators sign on.
Joan Tilton, the owner and president of Arlington Electric and Solar, says she’s been pleased to hear the commissioners' interest in feedback to the proposal. But she remains concerned because the “buy all/sell all” proposal would likely discourage people considering new solar systems. She says her customers like using the power they produce on site in their homes.
“When people put in these expensive systems, they pay for the privilege of collecting their own power from the sun. And the reason that they want to put it in is so that they can use their own power,” she said. “And turning net metering customers into wholesale power producers – people just wouldn’t want to do it.”
Tilton says a new system can cost between $15,000 and $40,000. And the Snohomish County proposal would likely more than double the time it takes to recoup that cost, from eight to 17 years.
Snohomish County PUD says they have no concrete plans right now. But they are not alone in considering future models.
Clark County in southwest Washington is beginning similar discussions. In Seattle, City Light is taking a wait-and-see approach. Puget Sound Energy says it crossed the threshold 18 months ago, but has no plans to end net metering at this time.